As of 2025, the U.S. single-family market features near-record home prices, gradually improving but still lean resale inventory, and sales volumes below pre‑pandemic norms; new construction plays an outsized role compared with the 2010s. National price indices from S&P CoreLogic Case‑Shiller and FHFA show year‑over‑year gains into 2025, while NAR reports subdued existing‑home sales and still‑tight months’ supply supporting prices.
Now, with mortgage rates well above 2020 lows but off 2023 peaks, affordability remains stretched and competition varies by micro‑market. Weekly averages from Freddie Mac’s PMMS have the 30‑year fixed generally in the mid‑6% to low‑7% range, and sellers more often offer concessions than during the 2021 frenzy, a trend that remained elevated into 2024 per Redfin.
The homebuying process itself has permanently modernized since COVID‑19. Digital‑first discovery, 3D/virtual tours, hybrid/desktop appraisal options, and e‑closings (including remote online notarization where allowed) are now common. Buying a home in 2025 still requires careful preparation at every step — from discovery through negotiation and closing — and ensuring the right homeowners insurance is in place to protect your long‑term financial well‑being. See NAR’s buyer/seller profile, Fannie Mae’s appraisal modernization, and ALTA’s RON overview for what to expect.
In this article:
- State of the Real Estate Market During the Pandemic
- What to Consider Before Starting Your Home Search
- Top 5 Things to Negotiate For During a Pandemic
- How Will The Pandemic Impact Your Homeowners Insurance
- What Are The Experts Saying?
- The Bottom Line
State of the U.S. Housing Market in 2025
Nationally, home prices remain elevated with positive year‑over‑year gains, though momentum has cooled and metro‑level results are mixed. Track current readings via the S&P CoreLogic Case‑Shiller and FHFA price indices. Existing‑home sales remain below pre‑pandemic norms, with months’ supply improved but still lean by historical standards; see the latest NAR Existing‑Home Sales report for the current median price, sales pace, and inventory.
There are a few reasons for this: mortgage rates, while down from 2023 highs, remain elevated versus 2020–2021, limiting purchasing power (Freddie Mac PMMS); inventory is rebuilding only gradually (Realtor.com, Redfin); and demographics continue to support demand, with Millennials still a large share of buyers (NAR). Suburban preferences that emerged during the pandemic have persisted alongside renewed interest in select urban cores, with trends varying by metro (Redfin).
Meanwhile, resale inventory remains tight relative to the 2017–2019 period. Instead of emphasizing sanitization for showings as in early 2020, today’s sellers are focusing on pricing strategy, high‑quality listing media, and concessions (closing‑cost credits or rate buydowns) to broaden the buyer pool in rate‑sensitive segments (Redfin concessions analysis).
To compete in this type of market, prioritize fully underwritten pre‑approval, confirm your budget at current rates, and consider structures like seller credits or rate buydowns to improve affordability. Monitor weekly rates via PMMS and be ready to move quickly when favorable pricing appears.
What to Consider Before Starting Your Home Search
It’s essential to keep in mind there is more to snagging your house than outbidding those other buyers. Here’s a list of things to consider before you begin your search.
Understand your budget
It’s important to know how much you can afford and to recognize the factors that affect your budget today: mortgage rates that are far higher than in 2020–2021 (PMMS), tight but stable credit availability (MBA MCAI), and higher homeowners insurance premiums than a few years ago (Triple‑I). Start searching when you’re reasonably confident in your income stability and cash reserves. Keep in mind the following list of homeownership costs and make sure you’re budgeting for them:
- Home maintenance. Plumbing repairs, annual furnace check-ups, lawn maintenance, and other costs need to be a part of your budget. Materials and labor remain pricier than pre‑2020 levels, which can raise repair costs (Verisk reconstruction cost trends).
- Furniture and appliances. If you are moving to a larger space, or if you’re currently renting, make sure to consider the costs of buying basic appliances, like a refrigerator and washer and dryer, as well as some additional furnishings.
- Homeowners insurance. You will need proof of insurance before finalizing your home loan, and your homeowners insurance must be enough to cover expenses in the event of a worst-case scenario. Many lenders require that your home be insured for 100% of replacement costs, so make sure you’re prepared to protect your investment. Premiums have risen since the pandemic era; verify Coverage A/replacement cost and inflation guard at binding and renewal (Triple‑I).
Target the right real estate agent
Your real estate agent is your partner in helping you find the right house and negotiating the best price. Rely on trusted recommendations (such as those from friends or colleagues) to help you. Be sure the agent knows the local real estate market in which you want to live. Evaluate their expertise by asking to talk to their references; an agent that won’t give you references is not one to work with. Before deciding who to use, chat with several on the phone first, and confirm they’re fluent in 2024–2025 practice changes (written buyer agreements and decoupled compensation per NAR’s settlement), digital touring/e‑closing options (including RON where permitted), and wire‑fraud prevention (FBI IC3). The rule of thumb here is to ask a lot of questions.
Get pre-approved for a loan
While loan pre-approval doesn’t guarantee financing acceptance, it can give you a leg up on other buyers, especially in a competitive market. To prepare for pre-approval, gather your proof of income, credit report, employee verification, driver’s license, and social security card. A fully underwritten pre‑approval helps in multiple‑offer situations; expect today’s underwriting to emphasize ability‑to‑repay and prudent debt‑to‑income limits, with overall credit availability tighter than pre‑2020 (MBA MCAI).
Limit your COVID-19 exposure during your home search
An on-site visit might not be possible, so be prepared for virtual tours and document digitization. If you can tour the house in person, be sure the seller cleans before and after each showing. And, always bring — and wear — your mask.
Top 5 Things to Negotiate For During a Pandemic
Even armed with knowledge and a great team, it’s important to understand that, as a buyer, your expectations will differ from those of the seller. Wise negotiation brings the two of you closer to a signed contract, and a successful closing. Below are the top negotiating points for homebuyers during the COVID-19 pandemic.
| Recommendations | Why This Matters |
| Home Inspection | Keep your inspection contingency and use it as a tool to surface material issues early and negotiate repairs or credits. With competition normalized versus 2021, many buyers retain inspection and financing contingencies, and sellers increasingly offer credits where inventory has built (seller concessions remain elevated). Inspection findings also inform insurance needs (e.g., roof, electrical, wildfire/convective‑storm exposure) and can influence premiums. |
| Negotiation Flexibility | Your home-buying team will consist of many members, ranging from your real estate agent to your mortgage lender to your home inspector. Under normal circumstances, this team will operate like a well-oiled machine. However, with the uncertainties of COVID-19, the team will likely be less agile. To help, ask the seller for additional negotiation time and a flexible closing date to ensure that corners aren’t cut during the process. |
| A Deep Housing Cleaning | Beyond “broom clean,” you can request professional cleaning at move‑out and clear turnover standards in the contract. While pandemic‑era sanitizing protocols have faded, specifying condition on possession helps avoid disputes and supports a smooth move‑in. |
| A Coronavirus Clause | Rather than COVID‑specific clauses, ensure your contract clearly addresses force majeure and timeline flexibility, and coordinate appraisal strategy. Some loans may qualify for alternatives under modernization programs (e.g., Fannie Mae Value Acceptance + Property Data); otherwise plan for traditional appraisals. If remote notarization is desired, confirm state and counterparty eligibility (RON resources). |
| A One-year Home Warranty | Home warranties can offset surprises on major systems (HVAC, appliances) in your first year. They don’t replace homeowners insurance, but they can stabilize your budget while you address any inspection‑identified maintenance. |
How Will the Pandemic Impact Your Homeowners Insurance?
Home warranties are just one part of the home-protection focus. Having the right homeowners insurance in place is also essential when it comes to protecting your investment. In the current market, elevated catastrophe losses and reconstruction costs have pushed premiums higher and tightened underwriting in some regions, so keep the following considerations in mind (NOAA; Triple‑I; Verisk).
Pandemic uncertainty in coverage
The pandemic’s long-term impact on consumer’s home insurance is uncertain, but with families spending more time at home, there are different liabilities to consider. For example, you’ll need to ensure you have enough coverage for any work-from-home equipment, and you’ll also need to be more mindful of attractive nuisances on your property, like swimming pools, trampolines, tree houses, and fire pits, since kids are spending less time at school and more time at home and walking around the neighborhood.
Unfortunately, insurance fraud has also been historically higher during times of economic unrest, so be careful when selecting your provider. To ensure that you and your house are adequately covered, don’t go cheap, and make sure your budget can cover additional costs that may crop up in the future.
Paying for homeowners insurance during COVID-19
In light of the coronavirus pandemic, the National Association of Insurance Commissioners states to implement insurance continuity plans for consumers. For example:
- Most states now authorize some form of remote online notarization, which can streamline closings and policy execution when counterparties and loan programs permit it (ALTA RON overview).
- Homeowners insurance premiums rose sharply in recent years, and carriers have adjusted deductibles and roof coverage terms in some states; review your declarations and ask about options to manage costs (Triple‑I).
- Record U.S. billion‑dollar weather events increased catastrophe costs that flow through to premiums and underwriting in exposed areas (NOAA).
- Reconstruction costs remain elevated versus pre‑2020; confirm Coverage A (dwelling), inflation guard, and ordinance or law coverage so you’re not underinsured (Verisk).
- Amid higher prices, shopping and switching reached record levels; ask your carrier or agent about discounts, payment plans, and bundling to improve affordability (J.D. Power).
- Seller concessions are more common in today’s market; when permitted by your lender, credits can help offset closing costs so you can allocate cash to premiums and reserves (Redfin).
For those who are buying homes, many homeowners insurance companies are offering payment solutions for both existing policyholders and new homebuyers who need coverage to satisfy mortgage requirements, but who might not be able to afford to pay the monthly or annual premium due to coronavirus-related hardships.
Tips for reducing your homeowners insurance rates
As you’re researching the right homeowners insurance, use these tips to help you reduce your overall rates:
- Increase your deductible. The deductible is the amount you pay toward a loss before your insurance coverage kicks in. The higher the deductible, the more money you can save on premiums. While most insurance companies recommend a deductible of at least $500, if you can afford to raise that to $1,000, you could save up to 25% on the policy.
- Consider bundling. Some insurance companies offer “bundled” policies. If you purchase auto and homeowners insurance from the same company, you could lower the costs of both.
- Improve your home security. You could get a discount of at least 5% for installing a smoke detector, burglar alarm, or dead-bolt locks. If you feel like making more of an investment, installing a burglar or fire alarm that rings directly at a monitoring station could also mean a hefty insurance rate discount.
- Maintain your credit. A good credit score is just as important for saving money on your insurance policy as it is for getting that low-interest loan. Avoid debt that is in default, and be sure you pay your credit card balances each month.
What Are The Experts Saying?
Real Estate Agent: Adrienne Allen, Head of Real Estate for Homie in Nevada
What are the biggest pain points for your clients during the pandemic? In 2025, buyers are navigating higher monthly payments than a few years ago and uneven inventory from one neighborhood to the next. Success usually comes from pairing fully underwritten pre‑approvals with flexible closing timelines and asking for targeted concessions like seller‑paid rate buydowns in slower submarkets.
What advantages does our new reality offer to new homebuyers? We’ve returned to a more balanced negotiation in many price tiers. Buyers can more often keep inspection and financing contingencies, and builders are offering incentives. Digital touring and e‑signing mean we can preview more homes faster and focus in‑person time where it counts.
If you could wave a magic wand and instantly win one concession in negotiations (besides a lower price), what would you choose? Seller credits to fund a permanent or temporary rate buydown. That structure can improve a buyer’s monthly payment more than a small price cut and often broadens the pool of eligible buyers.
Insurance Expert: Thomas York, President, CastleWise Insurance Group LLC, and CastleWise Realty Group, LLC
What are the biggest pain points for your clients during the pandemic? Higher premiums and tighter underwriting in catastrophe‑exposed areas. We’re spending more time validating replacement cost estimates and roof condition, and helping buyers shop early so their policy is bindable before closing. Digital inspections and photo documentation are common parts of the process now.
What advantages does our new reality offer to homebuyers? Carriers have improved digital tools, quotes are faster, and shoppers can compare more options. Many clients save by bundling, adjusting deductibles thoughtfully, and adding targeted endorsements for the risks that matter most to their home.
What recommendations would you give to new homeowners in terms of what insurance they should look for during the pandemic? Review Coverage A against current rebuild costs, know your wind/hail or hurricane deductibles, and clarify roof settlement terms. Consider endorsements like service line or equipment breakdown where relevant, and review exclusions (including communicable disease liability exclusions) with your agent annually as pricing and terms evolve.
The Bottom Line
Even in a strong economy, buying a home requires preparation, research, and finding the right people to help you out. In 2025, the process blends robust digital tools with in‑person diligence, and success often hinges on realistic budgeting under current rates, flexible timelines, and data‑driven negotiation.
Also, make sure you negotiate for concessions in the process that will alleviate some of the uncertainties associated with buying a home during COVID-19. And remember: Properly budgeting for and protecting your new investment with the right homeowners insurance is even more critical now than ever before.
